Demand for residential real estate in Q3 surpasses pre-Covid levels by 30-40%
MUMBAI: The uncertainty in India’s economy due to the impact of COVID-19 is to be noted. After this hard time, the real estate industry is witnessing a growth recovery in demand as property searches. The demand has increased by 30-40% as compared to pre-Covid levels, according to the results of significant data.
The previous edition of the Report has said that in the month April-June (Q2) 2020 the consumer searches reached pre-COVID levels in June after falling by as much as 50% during April. Besides that, the customer’s search pattern holds the same trend. Since then and as of September end the customer searches have increased almost 30-40% higher than the pre-COVID levels.
The consumer preference has majorly moved towards affordable and mid-segment properties.
Sudhir Pai, CEO, Magicbricks has also said that “With the festive season just around the corner, we are witnessing a sharp recovery in demand and prices have remained stable for the July-September quarter after falling up to 5% in the April-June quarter of 2020. This augurs well for the industry and we hope consumers’ buying sentiment will continue to improve and translate into transactions in the coming quarters.”
He also stated that the next 6-8 months are going to be crucial for the revival of the residential sector. The onset of the pandemic and the ensuing lockdown have changed consumer preferences and the shift is towards affordability as home buyers have reduced their budget but they haven’t changed their preference in terms of apartment size. In line with the overall economic sentiment, the consumers have reduced their budgets in most cities but they are not compromising on the size of the house and moving towards peripheral locations.
This trend is an alert of working professionals’ newly emerging need for additional rooms in homes with the altered lifestyle of having to work-from-home. However, it is too early to say but if these trends sustain in the long-term and how developers leverage the changing buyer preferences.
If we talk on the regional-level, the southern market of Hyderabad has slightly recovered posting a 2% price increment during the quarter after experiencing a dip of 5.2% in the previous quarter. Apart from that the real estate prices of the Mumbai Metropolitan Region (MMR) and the NCR region including Gurugram and Noida, posted a marginal increase in prices.
Apart from all other things the government has also taken some significant measures like an extension of RERA deadlines, reduction in stamp duty, and liquidity infusion in stressed projects through the SWAMIH fund. These things are expected to boost the confidence of home buyers and also help developers.
Increasing demand and stability in prices indicates that for now, the residential sector has managed to stay off the panic mode. It is also expected that the early arrival of the vaccine for Covid19, it should let the sector take its normal trajectory.
Bengaluru is on the way to recovery as searches for property grew by 47% in the September quarter after witnessing a fall of 14% in the June quarter owing to the lockdown. Furthermore, Chennai has depicted a modest recovery, with a greater focus on affordable housing, property searches increased by 35% in the region. In Hyderabad, independent houses and plots showed fully recovered in search volumes as compared to pre-Covid levels. On the other hand, Delhi witnessed a turnaround with more searches near the employment hubs.
